Correlation Between Associated British and Ecclesiastical Insurance
Can any of the company-specific risk be diversified away by investing in both Associated British and Ecclesiastical Insurance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Associated British and Ecclesiastical Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated British Foods and Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Associated British and Ecclesiastical Insurance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Associated British with a short position of Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and Ecclesiastical Insurance.
Diversification Opportunities for Associated British and Ecclesiastical Insurance
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Associated and Ecclesiastical is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance and Associated British is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Associated British Foods are associated (or correlated) with Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Associated British i.e., Associated British and Ecclesiastical Insurance go up and down completely randomly.
Pair Corralation between Associated British and Ecclesiastical Insurance
Assuming the 90 days trading horizon Associated British Foods is expected to generate 1.64 times more return on investment than Ecclesiastical Insurance. However, Associated British is 1.64 times more volatile than Ecclesiastical Insurance Office. It trades about 0.03 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about 0.03 per unit of risk. If you would invest 179,229 in Associated British Foods on September 19, 2024 and sell it today you would earn a total of 27,971 from holding Associated British Foods or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated British Foods vs. Ecclesiastical Insurance Offic
Performance |
| Timeline |
| Associated British Foods |
| Ecclesiastical Insurance |
Associated British and Ecclesiastical Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated British and Ecclesiastical Insurance
The main advantage of trading using opposite Associated British and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated British position performs unexpectedly, Ecclesiastical Insurance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.| Associated British vs. Samsung Electronics Co | Associated British vs. Samsung Electronics Co | Associated British vs. Hyundai Motor | Associated British vs. Toyota Motor Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |